# Guide to Outsourcing Your Human Resources Discover the strategic advantages and practical insights of outsourcing your human resources with our guide below. ## What is outsourced HR? Outsourced HR is when a business hires an outside company to carry out HR functions like recruiting and hiring new employees. An outsourced HR company takes on a wide array of administrative tasks as requested by the business owner. They can do everything from administering employee benefits to background checks to ensuring compliance with employment laws and regulations. Some outsourced HR tasks can be performed by automated HR software systems. ## Should HR be outsourced? As a new or small business owner, you’re probably wondering what you should do about human resources. You may feel that your company isn’t large enough yet that you need to use an outside HR service. Outsourcing your HR provides many benefits that you might not be aware of. Consider the following advantages you gain by passing this role off to an HR specialist: - **You can save time.** As the owner, your time is best spent running and growing your business — not dealing with paperwork and employment issues. Leave the interviewing, hiring, and training to the HR staff so you can focus more on your current employees and customers. - **You can save money.** Working with an HR outsourcing company can cost less than hiring a full-time HR department within your business. They can also leverage their expertise to help you get deals on benefits and services. - **Conflicts are more easily resolved.** The HR company acts as a mediator between yourself and an employee. They could also resolve issues between employees. As a neutral party, their conflict resolutions can be fair and decisive. - **Compliance is ensured.** There are many employment laws and regulations at the state and federal level. An HR specialist has the knowledge needed to ensure your business complies with them all. This benefit protects you from lawsuits and fines. - **Employees are accurately paid on-time.** HR takes care of payroll processing and helps with budget management to ensure everyone is paid the right amount at the right time. Often, they use an automated system to do so. This allows them to have more time to focus on other tasks, such as coordinating a wellness program or maintaining employee morale. ## What types of HR functions are generally outsourced? There are four main HR functions that are usually outsourced. Some tasks, such as compliance, will become more of a concern as your company grows from just a few employees to more than 10. ### Payroll and Related Tax Services In larger companies, the payroll is usually managed by an HR or accounting department; however, in small companies, this task often falls to the owners. An easy way to lift a lot of burden off your shoulders is to outsource payroll services and related tax services to an outside HR company. They would take care of the following tasks so you wouldn’t have to: - Keep employee records, including pay rates - Track hours worked and time off - Calculate employee pay - Factor in variables like overtime, sick pay, vacation pay, and bonuses - Distribute payments via direct deposit or check - Figure out employee tax withholding - Produce reports for tax filing requirements ### Benefits Administration Another main function of human resources is to administer employee benefits. An HR specialist informs each employee about available benefits and makes sure they understand all of their options. They administer benefits like health care, retirement, and paid time off. ### Employment Law Compliance In the U.S., the Department of Labor enforces more than 180 federal employment laws and regulations. Workers are protected by these laws, and all businesses must abide by them. An HR specialist helps to ensure that your company stays in compliance with all employment laws. ### Employee Assistance Program (EAP) and Counseling An Employee Assistance Program (EAP) is a program that offers help to employees with personal and/or work-related problems. In addition to counseling, an HR representative can provide: - Free and confidential assessments - Referrals - Follow-up services ## The Best HR Services for Small Businesses With fewer employees and tighter budgets, small businesses have different HR needs than larger businesses. We’ve compiled reviews of the best HR services for small businesses below. ### Paychex Flex Paychex Flex is a large company, with more than 600 HR professionals and more than 200 compliance experts. The company uses award-winning integrated HR and payroll technology to provide solutions for your business. ### Oasis Outsourcing Oasis Outsourcing is a professional employer organization (PEO) that offers specialized HR services to companies of all sizes. ### TriNet TriNet is another PEO that provides small and medium businesses with HR solutions. They also tailor their services by industry, as each has its own unique needs and challenges. ### Insperity Insperity offers full-service HR solutions. Their experts customize a package of HR services to fit your business. ## Outsource human resources and improve your business Business owners choose to outsource human resources for a variety of reasons, one being that the benefits of HR outsourcing are many. You may be starting a new business and don’t know everything about human resource management, or maybe your business is growing and you need to streamline your administrative tasks. No matter your situation, it’s worth taking time to investigate HR solutions designed to help your business succeed.